Martin Corporation Manufactures Two Products-Plows and Harrows

Multiple Choice

Martin Corporation manufactures two products-Plows and Harrows.The annual production and sales of Plows is 1,000 units,while 2,000 units of Harrows are produced and sold.The company has traditionally used direct labour hours to allocate its overhead to products.Plows require 5.0 direct labour hours per unit,while Harrows require 2.0 direct labour hours per unit.The total estimated overhead for the period is $603,500.The company is looking at the possibility of changing to an activity-based costing system for its products.If the company used an activity-based costing system,it would have the following three activity cost pools:

The cost pool activity rate for Machining Costs would be closest to

A) $223.52 per Machine hour.
B) $198.53 per Machine hour.
C) $125.00 per Machine hour.
D) $37.50 per Machine hour.